Bitcoin Lending Innovation Set for Debut With $500M in Initial Commitments

Sui, a layer-1 blockchain, is preparing to roll out Hashi, an institutional lending protocol that allows Bitcoin holders to use their BTC as collateral without moving the underlying coins off the Bitcoin blockchain.

The launch could provide a significant boost to Bitcoin-backed financial services. Hashi’s mainnet is expected to go live in phases later this month, enabling institutions to access lending opportunities while keeping their original Bitcoin on its native network.

The initiative has attracted $500 million in capital commitments from more than 20 industry partners. While the funding represents pledges rather than deposits already made, it is intended to give Hashi a strong liquidity foundation from the beginning.

Adeniyi Abiodun, co-founder and chief product officer of Mysten Labs, the original developer of Sui, said Hashi’s financial backing and industry support reflect growing institutional interest in putting Bitcoin to work without sacrificing essential security protections.

The protocol seeks to unlock a large pool of inactive Bitcoin holdings. Sui estimates that approximately $1 trillion worth of BTC remains idle. Institutional investors and companies have had limited access to compliant and transparent infrastructure for using their native Bitcoin in decentralized finance (DeFi).

Bitcoin-backed loans are also finding uses beyond speculative trading. Holders increasingly rely on BTC-collateralized borrowing to pay for university education, acquire real estate and meet business working-capital needs.

Nathan McCauley, co-founder and CEO of Anchorage Digital, said corporations and institutional investors hold substantial Bitcoin reserves but have been unable to fully utilize them because of technological constraints. Anchorage Digital is an initial Hashi partner and intends to provide stablecoin liquidity to the network.

McCauley said connecting Anchorage Digital’s institutional clients to Hashi could transform how they access financial services backed by Bitcoin.

Hashi avoids the need to transfer BTC through cross-chain bridges. Instead, users secure their Bitcoin in a vault address directly on the Bitcoin blockchain. The vault uses a 2-of-2 multisignature system, requiring cryptographic approval from both Hashi validators. An independent guardian layer adds another safeguard by monitoring collateral movements and slowing potentially suspicious activity.

Once the Bitcoin is locked, Hashi issues hBTC tokens on Sui, with each token backed by the deposited BTC. The original coins remain on the Bitcoin network, while hBTC can be used across applications on Sui.

The tokens can support lending, borrowing, credit markets and trading involving real-world assets. To withdraw their original Bitcoin, users must permanently burn the corresponding hBTC tokens on Sui. This triggers the multisignature process that releases the locked BTC back to its owner.

Hashi has also undergone independent security assessments to address institutional requirements. Certora formally verified its smart contracts, while CommonPrefix reviewed the cryptographic framework behind its multi-party computation (MPC) protocol.